Stephen Adams – Written Evidence (TWP0012)
The specific relevance of oversight and accountability in trade agreements
- The role of Parliament in treaty ratification in the British (and similar) systems is fundamental, because it confers democratic legitimacy on agreements both for citizens whose treatment is implicated but also for any courts subsequently interpreting the significance of an agreement and its implementation. It is not unreasonable to argue that the UK’s current structures for Parliamentary oversight of treaties represent the rudimentary minimum to have fulfilled this important accountability. This is especially important in trade agreements, which have important domestic effects. These effects at the firm and sectoral level can be far-reaching and are inherently distributional. Trade agreements should thus be seen as a distinct category of international treaty that belong to the universe of domestic regulation and policy and the UK’s domestic market structure and economic settlement.
- Parliament’s role in scrutinising the domestic effect of trade treaties is important because trade agreements can compel changes in domestic law alongside changes to the UK’s external tariff. However, it is also important to recognise that trade agreements are important because they can compel the UK not to change its current law, regulation or practice in future. This latter effect can appear to have limited practical relevance, but in fact it touches on quasi-constitutional issues in the UK system. These should be treated as politically important by Parliamentarians cognisant of their obligations to successor Parliaments. This pervasive effect in areas of regulation is fundamental to modern trade agreements and can touch on sensitive areas that can include the exercise of state quasi-monopolies, the precise form of UK intellectual property laws or the UK’s approach to technical or food regulation. These commitments need not be inherently controversial or problematic and they may have genuine value in exporting UK norms or securing commitments from others, but they need to be made transparently.
- While the 2010 Act creates a valuable new statutory basis for the established convention of Parliamentary disapproval of signed treaties, it does not require a defined level of scrutiny, debate or legislative approval. The weaknesses of Parliament’s role in treaty ratification has been well reviewed by the House of Lords in 2019. However, a key problem of the current framework for trade agreements is its sole focus on Parliament’s role in ratification of a final text, for the reasons set out below.
The relationship between the executive and the Parliament
- Establishing a Parliamentary oversight mechanism for trade treaty negotiation in the UK needs to take account of the structure of the relationship between the UK executive and legislature. Because the government of the UK almost by definition has a majority in Parliament, the legislature’s function will generally not be to use the withholding of support as a way of shaping executive conduct. This more confrontational dynamic exists in the relationship between the US Congress (where the Administration will often not have a reliable majority in both houses) and the European institutions, where the Parliament has no intrinsic link to the executive or its leadership. In the first instance, Congress uses the negotiation of Trade Promotion Authority to maximise its scope to impose definition on the Administration’s negotiating aims and to control the extent to which the up-down vote on a final agreement can become an undesirable binary choice for legislators. The European Parliament has no equivalent frontloaded legislative power to shape negotiating aims (although it will express these preferences by resolution), but it typically uses its potential power to reject agreements ex post to secure political commitments from the executive at the mandate stage (and thereafter).
- The UK Parliament cannot generally exercise either of these forms of leverage. It has no formal role in shaping negotiating mandates, and its powers of ratification are qualified as leverage by the executive’s basis in the Commons. For this reason, the role of Parliament needs to be conceptualised around developing forms of leverage with the executive that work pragmatically and constructively around the close relationship between the two. For the same reason, it is important that as much political space as possible is created before a mandate is confirmed to allow Parliamentarians to raise and debate concerns and establish acceptable negotiating parameters, free from the inevitable pressure to back the executive (for MPs from the governing majority) that come at the point of approving a text that has been finalised with a trading partner. Obviously, this pressure can be more limited in the Lords, which will enhance its scope for critical scrutiny at every stage.
- For the reasons set out above, Parliament’s chief form of leverage lies not in ratification, but in the convening of expert opinion and other relevant perspectives in open debate early in the negotiating process. This should focus on a) any scoping or feasibility analysis prepared by or for the government for a prospective agreement b) relevant precedents in past trade agreements and c) the likely expectations of a trading partner. Ideally this should be done in such a way to exert meaningful pressure on the cabinet to reflect Parliamentary views in the setting and adoption of negotiating mandates. This process should apply to any agreement that will a) adapt the UK’s external tariff b) potentially require change to UK domestic law or regulation in a way that would require parliamentary approval or c) potentially require the binding of current UK law, regulation or practice in a way that it is not already bound by international agreements. This would not limit Parliamentary scrutiny to mandates for free trade agreements under GATT XXIV/GATS V, but could see it expanded to WTO agreements and thematic agreements such as ACTA or TISA with the above effects.
- In the same way that the European Commission now publishes a recommended negotiating mandate for the Council which MEPs can scrutinise (and as US legislators effectively draft a mandate via the TPA process), UK MPs should be given an opportunity to review and comment on a draft mandate before it is submitted to cabinet for adoption. This should be done via existing committees with trade policy competence, or via a joint standing committee of both houses on the Australian model for general treaty scrutiny. The executive should be required to respond to parliamentary input on any mandate before it is confirmed in cabinet. Mandates should be drafted as specific guidance for negotiators on a chapter-by-chapter or issue-by-issue basis for any agreement and include clear guidance on the extent of acceptable concessions for negotiators. They should be published.
The negotiating process
- Specialist committees or a Joint Standing Committee on the model described above should have regular access to senior negotiators throughout negotiations. The approach developed by the INTA Committee of the European Parliament reflects an appropriate balance in which European Commission officials are expected to regularly brief and exchange views with the INTA committee on ongoing negotiations. Committees should proactively provided with reports on active negotiating rounds and all documents and consolidated texts released as part of negotiations. Negotiating mandates should be the consistent reference point in this oversight process against which government representatives should be required to explain and justify tactical and strategic choices.
- Serious consideration should be given to an effective mechanism for cross-Parliamentary collaboration with the devolved administrations on trade agreements in a way that respects the primacy of the Westminster Parliament in external affairs. There are a wide range of ways in which this could be done, including joint consultations or informal hearings with colleagues from the devolved administrations outside of committee formations. This process should be a permanent feature of committee work.
The final agreement
- Having shaped the debate on a negotiating mandate, Parliament requires an effective set of tools for engaging with an agreement once it has been negotiated. Ideally this should take the form of an independent impact assessment of an agreement conducted by an external body. In the EU system these assessments are generally commissioned from external academic sources, but the UK could consider following the US route of having them conducted by an existing arm’s length technical body that is charged with developing specialist capability for this purpose. In the US case such assessments are undertaken by the International Trade Commission. While recognising and acknowledging that even sophisticated modelling of the impacts of trade agreements comes with deep technical limitations, the process of reviewing the content and measurable impact of an agreement should be treated no less seriously than assessment of a major piece of legislation. This independent analysis would enable Parliamentarians to scrutinise an agreement on an objective and broadly non-partisan basis.
- Alongside an economic impact assessment, the government should also be required to produce a policy impact assessment that would specify the areas in which Parliament would be required to a) legislate to enable the implementation of an agreement or b) where the UK is committing to constrain its future legislative or policy freedom beyond existing international constraints, and in what ways. The government should be required to elaborate the necessity and value of this reduced policy space and its role in the securing of an agreement.
- Only after these assessments have been completed, reviewed by MPs and government responded to any comment from Parliament should primary or secondary legislation required for ratification of an agreement be laid, or a treaty itself be laid for ratification.
8 June 2020
 Such an analysis could in principle be part of the work of a new treaty scrutiny select committee, a body proposed by the Lords constitutional committee in 2019. https://publications.parliament.uk/pa/ld201719/ldselect/ldconst/345/345.pdf